When you sell a property, the asking price is usually the first number you think about, but the costs of selling property in Tenerife can make a significant difference to the amount you ultimately receive.
Taxes, fees and other deductions may be settled at completion or afterwards, so it helps to understand them before you commit to a buyer.
Not every cost applies to every seller. Much depends on whether you are tax resident in Spain, when and how you acquired the property, whether there is a loan secured on it and which municipality it is in. This guide explains each main cost, what affects it and where independent advice is worth taking. It is general information, not personal legal or tax advice.
What Costs Should Sellers Expect in Tenerife?
Depending on your circumstances, the main seller-side costs are:
- Estate agent fees
- Legal and administrative costs
- Capital gains tax
- The 3% withholding for sellers who are not tax resident in Spain
- Municipal land-value tax (plusvalía municipal)
- Cancellation of any loan secured on the property
- The Energy Performance Certificate and other documents
- Community charges, local property tax and utility adjustments
- Occasional extras, such as repairs or clearance
1. Estate Agent Fees
Tenerife estate agents set their fees in different ways, and no single standard applies across the island. The fee depends on the real estate agency and on the agreement you sign, so compare proposals on the same basis rather than on the headline figure alone.
It also helps to ask what the service covers. This may include marketing the property with professional photography, floor plans and property portals, as well as handling buyer enquiries and viewings.
Before you sign, check:
- How the fee is calculated and when it becomes payable
- Whether IGIC, the Canary Islands indirect tax, is included in the quoted fee or added on top
- Whether the agreement is exclusive or non-exclusive, and how long it lasts
A lower fee with fewer services is not necessarily better value, and a higher fee does not guarantee a better result. Get the terms in writing.
2. Legal and Administrative Costs
Most people who sell a property use some professional support, though not every seller needs every service. It is sensible to use a professional for anything with legal or tax consequences. Possible costs include:
- Lawyer: many sellers use a lawyer to check the title and any registered charges, review the contract and attend the signing.
- Gestor: handles paperwork such as utility changes, local tax filings and registry procedures.
- Accountant or tax adviser: helps estimate or file capital gains tax, particularly for owners who live outside Spain.
- Power of attorney: allows a representative to sign for you if you cannot attend. It involves notary costs and, if signed abroad, sometimes extra formalities.
- Translations: sworn translations of foreign documents where an authority requires them.
Legal fees and other professional charges vary with the professional and the complexity of the sale. Ask for written quotes that say exactly what each covers.
3. Capital Gains Tax When You Sell a Property in Tenerife
Capital gains tax is charged on the taxable gain, not simply on the sale price minus the purchase price. The calculation compares an acquisition value with a transfer value, adjusted for certain items.
- Acquisition value starts with the price you paid when you bought the property and can include some purchase taxes and costs.
- Transfer value is generally the sale price, and you may deduct certain costs directly linked to the sale of the property.
- Improvements that add value, as opposed to routine maintenance, may also affect the gain if they are properly documented.
Keep the purchase deed, invoices for reforms and receipts for taxes and fees paid. If the property was inherited or gifted, the acquisition value may be established differently.
Treatment also depends on tax residency. Residents generally report the gain in their Spanish income tax return. Owners who are not tax residents in Spain are dealt with under the rules for non-residents. Rates, methods and deadlines can differ, so no single rate applies to everyone.
Reliefs or exemptions may exist in some circumstances, for example in connection with a main home, but they come with conditions. Selling a property in Spain can be taxed differently depending on your status, so ask a tax adviser or accountant to check your position before you accept an offer.
4. The 3% Withholding for Non-Resident Sellers
This is the point that most often confuses owners who live outside Spain, so it is worth being precise.
Who it applies to. The withholding generally applies when the seller is not a tax resident in Spain.
Who withholds it? The buyer. They keep 3% of the sale price and pay it to the Spanish tax authority on the seller’s behalf, instead of paying that part to you. It is based on the sale price, not on your profit.
Why it exists. It acts as an advance payment towards the seller’s Spanish tax liability arising from the transaction.
What it is not. The 3% is not an extra tax and not automatically your final capital gains bill. It is an advance payment. Once the property is sold, your actual liability is calculated. If the final tax is higher than the amount withheld, you may owe more. If it is lower, you may be able to claim a refund.
In practical terms:
- The money you receive at completion will be less than the full sale price, because 3% goes to the tax authority instead.
- Keep proof that the buyer has paid it, and ask your lawyer to confirm this.
- Deadlines apply to the final filing, so do not leave it until later.
Sellers who are tax resident in Spain are generally not subject to this withholding, but residency depends on individual circumstances, not simply on where you live or own property. Confirm your status with an adviser early, because it changes the figures at completion.
5. Plusvalía Municipal
This is a local tax linked to the increase in the value of urban land while you owned the property. It applies to the value of the land, not the building, and it is separate from capital gains tax.
It is normally handled with the local authority of the municipality where the property is located. Whether any tax is due, and how much, depends on the municipality’s rules and the circumstances of the transfer, such as the period of ownership and the recorded land values. In some cases no tax may be payable. Do not rely on figures quoted for another municipality.
In a standard sale, the seller is generally the taxpayer, so it is for the seller to pay. A filing deadline applies after the transfer, so the timing should be checked with the relevant municipality. Ask your lawyer or gestor to request an estimate from the local town hall early, so it is in your budget.
6. Mortgage Cancellation and Registry Costs
If your property has a mortgage, there are two separate steps:
- Repaying the outstanding loan. You repay the balance to the bank, often from the sale proceeds at completion, and the bank confirms the debt is cleared.
- Cancelling the registered charge. The charge securing the lending is removed from the Land Registry. This normally involves a deed signed before a notary, followed by registration.
Repaying the loan does not automatically remove the registered charge. A buyer’s lawyer will want to see that the charge has been cancelled or that cancellation is properly arranged.
Costs can arise at both stages. Your bank may apply early repayment or cancellation fees, depending on your loan contract. Formal cancellation can involve professional, registry and administrative costs, as well as notary charges.
7. Energy Performance Certificate and Property Documents
For most residential property sales, a valid Energy Performance Certificate (EPC) is required, subject to statutory exemptions. The cost depends on the property. The EPC records the energy rating of the building. It is not an assessment of the property’s condition or market value.
Sellers are commonly asked for:
- Identification, such as a passport or national ID
- Your NIE, the Spanish tax identification number for foreigners
- The title deeds
- The most recent local property tax receipt
- Community information, including any arrears or pending charges
- Information on any loan or registered charge
- The EPC
Requirements vary by property and transaction. The notary or the buyer’s lawyer may ask for further certificates or documents.
8. Community Fees, IBI and Outstanding Debts
Buyers, lawyers and the notary will want to know what is owed before completion of the sale, so outstanding charges need to be identified early. Typically this means:
- Community charges: a certificate from the community administrator showing what has been paid and whether there are arrears or approved extra levies.
- Local property tax: the annual municipal tax on the property. Unpaid amounts should be settled or evidenced.
- Utilities: final readings and the transfer or cancellation of electricity, water and other contracts.
There is no single rule for how these are dealt with. How particular charges are dealt with between buyer and seller depends on the item, the completion date and the terms of the transaction. Clearing them beforehand avoids delays at the signing.
9. Other Costs That May Arise
Depending on the property, you may also face:
- Repairs or preparation before viewings
- Removals or clearance of the property
- Professional cleaning before handover
- Obtaining certificates or regularising missing paperwork
- Bank charges, for example on international transfers or currency conversion if you move the proceeds abroad
How Much Should You Budget When Selling?
There is no reliable Tenerife-wide percentage, because the total depends on your tax status, any loan on the property, your purchase history and the terms you agree. Build the estimate from real figures instead.
Run the calculation at your asking price and again for each offer you receive. Once you accept one, the agreed sale price becomes your starting figure. Then deduct:
- The agent’s fee, and IGIC where it applies
- The repayment figure for any outstanding loan, plus bank charges
- Legal and administrative costs, based on written quotes
- An estimate of the local land-value tax from the relevant authority
- An estimate of capital gains tax from a tax adviser
- The EPC, documents and any preparation costs
Be sure to include legal fees. The result is your expected net proceeds.
If you are not tax resident in Spain, treat the 3% withholding as an advance against your tax, not an extra cost. Your final position becomes clear only once the tax is calculated and the withheld amount credited.
Do this before you accept an offer. It shows the price you need to sell the property for.
Seller Checklist Before Putting a Property on the Market
- Confirm the estate agent agreement, including fees, IGIC and services
- Gather your ID and property documents, including the title deeds
- Check the status of any mortgage and request a repayment figure
- Check that community payments are up to date and request a certificate
- Check your local property tax receipts and other local charges
- Review your capital gains position with a tax adviser
- Confirm whether the 3% withholding applies to you
- Ask the local authority for an estimate of the land value tax
- Arrange the EPC where needed
- Estimate your net proceeds before you accept an offer
Selling Your Property with Tenerife Property Gallery
If you want to sell, Tenerife Property Gallery can help with a valuation based on what your property is worth and advise on a sensible asking price. We can also handle marketing, buyer enquiries and viewings, and coordinate with the other parties through the selling process, from listing to completion.
Specialist legal and tax advice should come from your independent lawyer, accountant or tax adviser, and we are happy to work alongside them.
If you have questions about selling, get in touch to talk through your property and the next steps.
